Investment Rating - The report maintains a "Buy" rating for the food and beverage industry [5]. Core Viewpoints - The liquor sector is currently in a deep value zone, with the CITIC liquor index showing a rebound and a dividend yield of 3.72% as of July 25, 2025, indicating strong profitability and willingness to distribute dividends [1][13]. - The restaurant supply chain is undergoing active transformation, with companies like Weizhi Xiang expanding their product categories and enhancing their sales channels, particularly in lower-tier cities [2][14]. - The snack food sector is focusing on steady growth in store openings and exploring new product categories, with companies like Wancheng Group adapting to market demands [3][15]. Summary by Sections Liquor Industry - The CITIC liquor index has seen a rebound, with a dividend yield of 3.72% as of July 25, 2025, placing it in a deep value zone [1][13]. - The cumulative net profit for the liquor sector is projected to reach 166.6 billion yuan in 2024, with a dividend payout ratio of 71% [1][13]. - The proportion of actively managed equity public funds holding liquor stocks has decreased to 5.1%, indicating significant clearing of positions [1][13]. - The market price of Moutai has dropped over 10% since the announcement of austerity measures, impacting confidence in the market [1][13]. Restaurant Supply Chain - Weizhi Xiang is actively transforming its channels, expanding product categories, and enhancing its online presence to boost sales [2][14]. - The company is also focusing on expanding into lower-tier cities and encouraging franchisees to open multiple stores [2][14]. - The B-end group meal channel has shown significant growth, with expectations for further expansion [2][14]. Snack Food Sector - Wancheng Group is maintaining a steady pace of store openings, with an increase in customer traffic despite a slight decline in average transaction value [3][15]. - The company is transitioning from rapid expansion to improving operational efficiency and brand building [3][15]. - New product categories are being explored, including collaborations with local suppliers for baked goods [3][15]. Investment Recommendations - The report suggests maintaining positions in dairy and snack sectors, recommending companies like Yili and Yanjinpuzi for core holdings [4][43]. - It also advises flexible trading in underperforming sectors with potential for recovery, such as Lihai Food and New Dairy [4][43]. - For the liquor sector, it recommends focusing on companies with better competitive positioning, such as Kweichow Moutai and Wuliangye [4][43].

Industry Overview - The transportation sector has seen a year-to-date decline of approximately -1.3% as of June 10, 2025, slightly outperforming the Shanghai and Shenzhen 300 index, which declined by -1.6% [1] - The express delivery and logistics sub-sectors have shown stronger performance, primarily driven by the rise of SF Express [1] - The market's preference for earnings certainty is reflected in the varying performances of different sub-sectors [1] Mid-term Outlook - The transportation sector faces both challenges and opportunities in the second half of the year, with pessimistic expectations for some cyclical bottom industries presenting potential opportunities [2] - Price competition is a normal phenomenon in the industry, and government efforts to curb excessive competition indicate a desire to establish a baseline for pricing behavior [2] - The express delivery sector is experiencing intensified price wars, particularly among leading companies, which is likely to impact future pricing levels [2] Express Delivery Sector - The express delivery sector is currently in a high-intensity price war, with major players like Zhongtong and Yuantong competing aggressively for market share, leading to a decline in overall industry profits [3] - The market's expectations for the express delivery sector are low, with the per-share market value of listed companies nearing historical lows [3] - The express delivery industry is at a cyclical bottom, with short-term earnings under pressure, but long-term profitability is expected to improve as price wars subside [3] Aviation Sector - Despite pressure on profitability in the first quarter, the aviation industry is expected to rebalance supply and demand after a prolonged period of excess capacity [4] - The recovery of profitability in the aviation sector will depend on the industry's ability to manage supply constraints while maintaining high passenger load factors [5] - The upcoming peak season is anticipated to provide significant upward elasticity for airline stocks, with expected improvements in ticket prices and favorable fuel costs compared to the previous year [5] Highway Sector - The valuation of the highway sector in A-shares is relatively high, prompting a shift in investment opportunities towards Hong Kong stocks [6] - A-share prices of A+H highway companies are trading at over a 50% premium compared to their Hong Kong counterparts, with Hong Kong stocks showing better performance year-to-date [6] - Long-term, the highway sector is expected to benefit from stable earnings and a strong dividend willingness during a rate-cutting cycle, making it an attractive investment option [6]